As residents across the state protest plans for new data centers, developers are increasingly going to court to challenge municipal ordinances banning the facilities.
Montgomery, Andover, and Monroe have each been sued in recent weeks by developers seeking to overturn municipal prohibitions on data centers. The suits argue that local officials acted arbitrarily and without proper planning in mind when enacting the bans.
"The action of the Township Committee was clearly based upon public hysteria and political attention rather than sound land use planning," says the lawsuit targeting Montgomery's ordinance.
Nearly three dozen New Jersey municipalities have passed bans or restrictions on data centers, including Asbury Park, Neptune, Red Bank, Logan, and Millville, as residents statewide have griped that when data centers come to town, they bring noise, increased water use, and rising electricity demands.
Ben Dziobek, executive director of the Climate Revolution Action Network, said he isn't surprised developers are turning to the courts in their bids to construct data centers. Dziobek said it's a trend happening nationwide.
"Throughout the process of building a data center, these companies have just been so antidemocratic from the start," he said. "To try to subvert the will of residents who demanded their elected officials pass these ordinances to ban data centers in the municipality is no surprise to me at all."
He said he expects the tactic to keep spreading as opposition to data centers grows across the Garden State, and he noted that sentiment against data centers can be found in towns governed by Democrats and those run by Republicans.
"It's becoming clearer and clearer that hundreds of people are going to show up in opposition to these projects no matter where they are," Dziobek said. "This is the result of data centers and data center developers losing the support of public opinion."
The legal fights are unfolding against a broader debate in Trenton and town halls across the state over whether New Jersey should rein in the nascent data center industry. In May, Gov. Mikie Sherrill, a Democrat, said she backs legislation that would regulate data centers and seeks to implement new policies aimed at limiting the industry.
Assemblyman Mike Inganamort (R-Sussex) said artificial intelligence technology is still new enough that residents' concerns should be taken seriously, but he cautioned against blanket judgments. He said some data center developers have addressed concerns about noise and water usage.
"The bottom line is we're all using technology, we're all using artificial intelligence, that's just the reality. Those things don't exist in the atmosphere, they exist in a data center," he said, adding, "They're not all good or all bad."
Two of the three lawsuits filed in recent weeks allege that local officials who moved to ban data centers were motivated by public pressure, not the principles of law or planning.
Monroe in Gloucester County is facing a $300 million suit from Hexa Builders, a Princeton-based developer that seeks to build a 1-million-square-foot data center and warehouse. The 20-count complaint filed in June accuses the town of violating the state's Municipal Land Use Law and its own application procedures after local officials reversed a 2025 ordinance that had allowed data centers. The lawsuit also argues the data center ban violates the First Amendment.
"Data centers are a medium of expression and banning data centers would impose a significant burden on the free speech rights of all citizens in the United States," the complaint says.
That case is now pending in federal court.
Montgomery also faces a legal challenge after E. Khan Development filed suit in state Superior Court in Somerset County in July over the town's ordinance banning both data centers and detention centers. E. Khan, a Pennsylvania-based company that owns the 257-acre Kenvue campus in Skillman, argues the town targeted its property.
The company's site plan application for an industrial project on the site was declared complete on June 9, days before Montgomery's township committee adopted the ban.
Khan is asking a judge to declare the ordinance invalid and block the town from enforcing it, as well as seeking $300 million in damages.
Andover Township faces a similar suit, filed July 10 in Superior Court in Sussex County. National Land Developers LLC wants to build a data center on a roughly 100-acre former airport site, land the company says has sat vacant for over a decade. The township had amended its zoning laws to allow data centers there in 2025.
In May, the township committee voted 4-1 to introduce a separate ordinance adding new standards for data centers rather than an outright ban, but reversed course five days later following a rowdy township meeting that went viral on social media. A resident was removed from the meeting by police after cursing at the mayor and committee.
The committee held a special meeting where members unanimously introduced a townshipwide ban on data centers instead, repealing earlier ordinances that had allowed them. The lawsuit says the committee gave no explanation for the about-face.
Officials with the three towns did not respond to requests for comment.
Dziobek predicted that more lawsuits will come without a statewide moratorium in place. This week, Pennsylvania Gov. Josh Shapiro signed an executive order that Shapiro said provides "the strictest guardrails in the nation" on data center construction, though it falls short of a ban. New York Gov. Kathy Hochul last month signed a one-year moratorium on large data centers.
Dziobek called on Sherrill to follow Hochul's lead.
"We're waiting, we're waiting, we're waiting. Everyone around us is already doing something," Dziobek said.
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